Each one in plain English, with the numbers worked through for a shareholder.
4 Sept 2007asset acquisition disposition● Neutral
Warren filed the financial statements and pro forma figures it had promised for the June 20 and June 30, 2007 purchases of seven partnerships' properties. The properties had oil and gas sales of $5,970,527 in 2006 (down from $7,462,757 in 2005) and revenues exceeding direct operating expenses by $1,166,329 (versus $2,856,396 in 2005); for Q1 2007 the figures were $1,744,898 of sales and $783,649 excess. This closes the open thread on those financial statements; the filing also gives the June 30 share count as 414,139 (earlier filings said 414,200) and the June 20 shares at a market value of $46,843,043.
Effective August 9, 2007, Warren and its lenders amended the November 16, 2006 JPMorgan Chase-led credit agreement, raising the borrowing base (the cap on what it can draw) from $40 million to $50 million. The filing does not say how much is drawn or why the increase was made.
NWQ Investment Management Company, LLC reported a WARREN RESOURCES INC shareholding of 8,929,624 shares (16.48% of votes) in a periodic institutional filing.
On June 30, 2007 Warren bought the oil and gas interests of two more partnerships it manages, Oil Technology Fund-1999 Series A and B, for $1.8 million cash plus 414,200 restricted shares priced at $8.98 (a 20% discount to an $11.22 average). The properties have about 1.2 Bcfe of estimated proved developed producing reserves and are in Wyoming, Texas and California, and Warren assumed their environmental and well-plugging liabilities. This continues the June 20 partnership buy-ins and adds to the share count, and registration for resale has been requested.
22 June 2007asset acquisition disposition● NeutralMajor
On June 20, 2007 Warren bought the oil and gas interests of five Delaware limited partnerships it manages (formed 2000-2003) in Wyoming, Texas and California. It paid with about 3.48 million restricted shares priced at $10.80 (a 20% discount to a $13.50 average), with asset prices ranging from $3.6 million to $12.6 million per partnership, and assumed their environmental and well-plugging liabilities. The properties have about 9.9 Bcfe of estimated proved developed producing reserves, and the sellers have requested registration of the shares for resale, so existing shareholders are diluted. The filing lists 3,482,074 shares in one place and 3,482,076 in another.
NWQ Investment Management Company, LLC reported a WARREN RESOURCES INC shareholding of 10,962,136 shares (20.30% of votes) in a periodic institutional filing.
Wellington Management Company, LLP reported a WARREN RESOURCES INC shareholding of 2,200,000 shares (3.91% of votes) in a periodic institutional filing.
NWQ Investment Management Company, LLC reported a WARREN RESOURCES INC shareholding of 8,250,959 shares (15.30% of votes) in a periodic institutional filing.
Warren announced it issued a press release on January 25, 2007 giving 2006 oil and gas production and an operational update. The press release text is not included in the filing provided, so no production figures can be reported here.
After an independent director who sat on the audit committee resigned (reported December 29, 2006), NASDAQ noted on January 11, 2007 that the audit committee had only two independent members. Director Dominick D'Alleva joined the committee effective January 1, 2007, and on January 18, 2007 NASDAQ confirmed Warren is back in compliance, so the issue is resolved.
Warren E&P hired Bruce Berwager as Senior Vice President and General Manager – California, effective November 14, 2006, at a $265,000 salary with a $75,000 signing bonus, 50,000 options at $12.53 and a bonus of up to 75% of salary. He will run drilling and production at the Wilmington Townlot Unit and North Wilmington Unit fields. If he leaves after a change of control he gets a lump sum equal to a year's salary and his options vest immediately.
Effective November 16, 2006 Warren signed a revolving credit agreement with JPMorgan Chase as agent, allowing borrowing up to the lesser of the borrowing base, $150 million, or the amount Warren requests; the initial borrowing base is $40 million and it matures November 15, 2011. It is secured by substantially all assets and guaranteed by two subsidiaries, with covenants including a minimum current ratio of 1.0 and maximum net debt to EBITDAX of 3.5. This is Warren's first debt facility in the record; the CFO's press-release quote says it funds the 2007 capital budget including Wilmington and Atlantic Rim.
NWQ Investment Management Company, LLC reported a WARREN RESOURCES INC shareholding of 6,192,332 shares (11.60% of votes) in a periodic institutional filing.
Warren completed the purchase of oil and gas properties in Wyoming and California from two affiliated Delaware limited partnerships for $7.5 million ($7.1 million net of Warren's own partnership interests), paid as $2.7 million cash and $4.4 million in 383,072 restricted shares priced at $11.49. The properties carry about 1.7 Bcfe of estimated proved reserves, and Warren assumed their environmental and well-plugging liabilities and must seek registration of the shares for resale within a year of closing. Separately, the filing updates the old Gotham Insurance case: on April 26, 2006 the Texas Court of Appeals reversed the $1.8 million restitution award against Warren and the attorneys' fees award and sent the matter back to the trial court, so the earlier $1.8 million liability is not finally settled.
Wellington Global Holdings, Ltd. Not Applicable reported a WARREN RESOURCES INC shareholding of 1,581,000 shares (3.03% of votes) in a periodic institutional filing.
Wellington Management Company, LLP reported a WARREN RESOURCES INC shareholding of 3,917,200 shares (7.45% of votes) in a periodic institutional filing.
On December 9, 2005 Warren agreed to buy the North Wilmington Unit oil field in the Los Angeles Basin from Global Oil Production, LLC and Wilmington Management, LLC for $23 million cash, including 100% of the working interests (subject to about 15.5% royalty burdens). Closing was expected December 30, 2005, subject to customary conditions and price adjustments. The company's press release estimates 19.8 million barrels of oil equivalent of proved reserves net to Warren (1.7 million developed producing, 18.1 million undeveloped) and about 338 barrels a day net production; this adds a California oil asset alongside the Wyoming coalbed methane acreage.
On June 17, 2005 the company amended the employment agreements of CEO Norman Swanton (base salary $500,000) and CFO Timothy Larkin ($275,000), and signed new agreements with Lloyd Davies ($250,000) and David Fleming ($265,000). Davies and Fleming get severance on termination without cause and a lump sum equal to annual base salary if they leave after a change of control; their terms run through December 31, 2005 with automatic yearly renewal.
